This is also accounting for my increase in insurance costs due to adding insurance to the ADU. 

The only part that Property 1 pays on that loan is the escrow for property tax & insurance for Property 1.Thank you for your insight.You need to look at purchase price to determine cost basis, not how you financed the purchase.

This should include potential rental income, expenses (including property taxes, insurance, maintenance, and potential vacancy), and your expected return on investment. 

Quote from @Devin James: Quote from @Dominic Mazzarella: Quote from @Devin James: Everything went wrong with this investment:   - Took 4 months longer than expected   - Cost $10K more to build than we anticipated   - Sold for $20K less than we anticipatedWe still profited with a 30% return on equityThis is why I love Real Estate InvestingWhen you do your diligence and stay conservative with your numbers, it takes something really bad to lose money.Here was the original post:My siblings and I are building a home in North Port, FL.Here are the numbers: - Finished Home Value: $412Kish - Land Cost: $19,750.39 - Construction & Permitting Costs: $304,897Additional costs: - Environmental Site Assessment - General Liability Insurance - Builders Risk Insurance - Construction FinancingWe will be listing the home this weekPhotos coming soon!! 

Payment to the bank is $4,311 (includes escrow/insurance), total monthly rent $5,600, which leaves me roughly $1,300 monthly after expenses.

Insurance companies are taking a close look at building materials, quality, and updates. 

How much is insurance of these properties?

@Sofia De Santos Tavarez if you haven't already, have the property professionally inspected.This should catch MOST of the structural, health & code issues - but not all.

You have to adjust your expectations to match current reality, which includes higher mortgage rates, higher prices, more expensive taxes and insurance, more competition, etc.

@Kenneth Jenkins you forgot to mention owners that expect a PMC to use contractors off Craigslist that are unlicensed, NOT insured and rarely have acceptable experience/skill - but, they quote the "best" price.These same owners will sue a PMC if using these types of contractors results in a tenant lawsuit.